News item | 03-02-2023 | 5:15 pm
Debt counseling takes too long and too few people report to the municipality for help if they are struggling with problematic debts. Minister Schouten (Poverty Policy, Participation and Pensions) will therefore shorten the duration of debt assistance processes at municipalities to one and a half years and lower the threshold for municipal assistance. In this way, the minister wants to achieve that more people receive help and that they pay off their debts more quickly.
People go on with their debts for a long time before they sound the alarm. It will then take another three years before they have completed a debt assistance process and can look ahead again. During this period they have to survive on the bare minimum for a long time. This puts a heavy burden on people, as a result of which many do not persevere with the process and the financial problems actually increase. I want us to be there sooner when it comes to money concerns and for people to be able to get on with their lives as soon as possiblesaid Minister Schouten.
Remediation credits
Schouten wants to achieve a faster repayment of debts, among other things, by having all municipalities use remediation credits. In this case, the municipality takes over the debts of creditors, with which the total debt is repaid against final discharge. Households then only pay off with one creditor, namely the municipality or the credit bank. This provides peace of mind and shortens the duration of the debt assistance. In 2021, the government will set up a Guarantee Fund that will cover the risk for municipalities when issuing these loans. At present, about three-quarters of the municipalities have the option to use these credits.
The minister is also looking at possibilities to proactively approach people with problematic debts who are known to the government for help, starting with people who cannot afford their health insurance and who are known to the CAK.
Prevention
The number of households with debts is expected to increase in the coming period as a result of the energy crisis. Schouten wants to ensure that households with starting money problems come to the attention of care providers sooner, in order to prevent debts from rising. On Budget Day last year, the government structurally released forty million euros for, among other things, better early identification of debts by municipalities. The municipality receives information about payment arrears from their customers from energy suppliers, health insurers, landlords and drinking water companies. Municipalities then offer help. Municipalities can use these extra resources to offer personal help to more residents with money problems.
At the end of last year, the Ministry of Social Affairs and Employment launched an offensive with Geldfit to point out the available support to people with money worries and to encourage them to take the step towards help. People can call the Geldfit helpline anonymously, which lowers the threshold for seeking help. This year, Geldfit has increased the capacity of the number 0800-8115 with extra resources from the cabinet, so that it remains easily accessible even with the expected further increase in the number of requests for help.
Debt restructuring
Minister Schouten’s plans to halve the duration of debt assistance at municipalities from three to one and a half years are in line with the shorter period of debt restructuring before the court that the House of Representatives decided earlier this month. In principle, that period will also be halved to one and a half years. Debt rescheduling is an option in court if it is not possible to agree on a debt settlement via the municipality. The shortening of the debt restructuring period is laid down in legislation. Limiting the duration of a municipal debt settlement, which in principle does not require a change in the law, will ideally be implemented simultaneously.